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Analyzing the Big 3 oilfield service companies’ 1Q14 earnings

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The Big Three

Last week, the “Big Three” oilfield service companies reported earnings. The Big Three comprise Schlumberger (SLB), with a market cap of ~$130 billion, Halliburton (HAL), with a market cap of ~$55 billion, and Baker Hughes (BHI), with a market cap of ~$30 billion. These three companies offer a wide suite of oilfield services, including providing tools and equipment for drilling and completing wells, reservoir assessment services, well evaluation, well maintenance, and various chemicals and fluids needed for oilfield activity.

For 1Q14, SLB reported recurring earnings per share (or EPS) of $1.21, compared to consensus estimates of $1.20. HAL reported recurring EPS of $0.73, compared to consensus estimates of $0.71. BHI reported recurring EPS of $0.84, compared to consensus estimates of $0.78.

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In this series, we’ll go over the major themes that the Big Three discussed during earnings as well as briefly overview what drives the earnings of oilfield service names. Baker Hughes (BHI), Schlumberger (SLB), and Halliburton (HAL) are all significant components of the VanEck Vectors Oil Services ETF (OIH) and the Energy Select SPDR ETF (XLE).

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